In a year that’s seen e-commerce upstarts like V-Files bring young designers to the forefront, and Farfetch become a rare fashion retail ‘unicorn’ after being valued at $1 billion, commentators have been waiting for a shake up amongst the industry’s biggest players. That shake-up came last Tuesday, when Richemont SA confirmed it will merge Net-a-Porter with Italian rival Yoox SpA. As the fashion world and consumers alike react to the news, we’ve got the lowdown on what to expect next.
The historic deal will create the Yoox Net-a-Porter Group, trading on the Italian Stock Exchange – at the hotseat, it brings together former rivals in the companies’ respective founders, Federico Marchetti and Natalie Massenet. As Johann Rupert, Chairman of Richemont, stated this week, joining forces will safeguard the industry in times when established models are being increasingly disrupted. “It is with this in mind that we believe it is important to increase leadership and size to protect the uniqueness of the luxury industry,” he said. In numbers, the new powerhouse will create a business with combined net revenues in 2014 of £950m, with some 24 million visitors to its sites every month.
Apart from going over the somewhat intimidating numbers that will result from the deal, fashion commentators have been optimistic about what it means for the industry. While its tempting to see it as a damaging monolith, as Suzy Menkes writes in Vogue, the deal could do a lot to help smaller designers through the involvement of Federico Marchetti’s other site, The Corner. For her, the deal ‘will arguably do more to help small fashion talents than any bricks-and-mortar store alone could possibly imagine.’ But, as Thao Hua writes in the Wall Street Journal, the deal’s success will rely on the two companies overcoming their apparent differences – reminding readers that the two business ‘cater to different crowds.’
The plan after the transaction is for Yoox Net-a-Porter to raise a capital increase of as much as 200 million euros ($216 million), in order to propel expansion and gain new shareholders. The deal will go into effect in September.
All eyes will be on Natalie Massenet, the former Tatler journalist turned one-woman fashion powerhouse, as to how she approaches the new challenge of a merger from this September. All that’s certain is that the deal will create more than just a fashion mega-business – the combination of the ground breaking technological architecture behind each company will be as game changing as the clothes.
For more from Net-a-Porter as it enters a new era, catch Sarah Watson (VP Social Commerce) and Alexandra Hoffnung (Creative Director, Social Commerce) at our London Summit. The pair, who have worked closely with Natalie Massenet to change the rulebook of luxury fashion online, will be providing insight into R&D and entrepreneurialism in their talk, ‘Evolving ecommerce for the social generation.’
Reported by Claire Healy